It is no secret that India is on a mission to project itself as an alternative semiconductor & technology manufacturing destination to the world. This ambition was fairly visible in the union budget 2025. Finance Minister Nirmala Sitharaman more than doubled the fund earmarked for the semiconductor industry to Rs.2,499.96 crore for 2025-26 from Rs.1,200 announced in the previous budget.

The growing Indian cities need business investments more than ever before to align with this growth trajectory. It’s a great omen that the government has received a total investment commitment of Rs.1.52 lakh crore for various semiconductor projects in the country. Taiwan is one of India’s predominant competitors on the battle field of technology manufacturing. However, India has a strategy that doesn’t necessarily lock horns with the country,which already has a robust manufacturing hub. Instead, the Indian government is strategically building ties with Taiwan and finding a way to co-exist. This makes sense as the global semiconductor market is big enough for both of these countries. According to a McKinsey report, the global semiconductor industry is poised for a decade of growth and is projected to become a trillion-dollar industry by 2030. Furthermore, about 70 percent of growth is forecasted to be propelled by the automotive, computation and data storage, and wireless industries.

A few months ago, the Deputy Minister for Taiwan’s National Development, Kao Shien-Quey, opined that the scope of collaboration between India and Taiwan in areas of emerging and critical technologies, including manufacturing of semiconductors and electronics equipment, is huge. Subsequently, the Taiwanese companies are getting ready to build their plants in India with huge investments as a part of their China plus one strategy. With the recently granted approval for a $1 billion boost to the Apple India plant, Foxconn has now invested more than $2.7 billion in India.

India is responding more welcomely than ever toward this trend. The government frequently invites and assures companies to invest in India. Indeed, India recently awarded the Chief Executive Officer and Chairman of Taiwanese technology giant Hon Hai Technology Group (Foxconn), Young Liu, with the Padma Bhushan. Young Liu has been an advocate for India's potential in the electronics manufacturing sector.

Padma Bhushan is the third-highest civilian award in India, preceded by the Bharat Ratna and the Padma Vibhushan, followed by the Padma Shri. It is a well-deserved award as Young is a serial entrepreneur who founded three companies - a motherboard company in 1988 known as Young Micro Systems; a Northbridge and Southbridge IC design company in 1995 focused on the PC chipset and an ITE Tech and an ADSL IC design company, ITeX in 1997.

Bengaluru Wants to Regain Its Charm
One of the Indian states looking forward to making the most out of these opportunities is Karnataka. The state aspires to regain its swift pace of growth, especially in terms of technology and tech manufacturing business. Karnataka CM Siddaramaiah recently pointed out that the state suffered losses amounting to Rs.79,770 crore. According to him, Bengaluru requires an investment of at least Rs.55,586 crore over the next five years. Even though the state has been going through some rough patches recently, things are not looking that bleak for Karnataka. IT/ BT Minister Priyank Kharge recently announced that the government is devising a 'special' policy to give the semiconductor sector a push in the state.

In truth, an impressive number of investments are heading toward the state, especially the Silicon Valley of India, Bengaluru. One of them is from Chevron, the global energy giant. Chevron has announced its blueprint to invest $1 billion in Bengaluru over the next 5-6 years. The company is set to establish the Chevron Engineering and Innovation Excellence Centre (ENGINE) in the capital. The company expects the new facility to be crucial in its global operations and initiatives. According to reports, the new facility will focus on expanding the horizons of technology solutions for Chevron's international operations and innovating for lower carbon energy solutions. The proposed location for the ENGINE center is near Bellandur. The investment will leverage India's engineering and technology talent to support various projects across Chevron's enterprise, including engineering and digital services.

Taiwan's Bestec also proposed a Rs.200 crore investment through a manufacturing unit near Bengaluru. The new venture is expected to create 5,000 jobs over the next three years as the company plans to increase its investment in the unit gradually. If the reports are anything to go by, this new facility will focus on manufacturing adapters, chargers, and cables, with the goal of achieving an annual turnover of Rs.2,500 crore.

There is brighter news for the entrepreneurs as well. UAE-based Global Millennial Capital (GMCL), which invests in global tech startups, sees the Bengaluru market as a serious investment opportunity with its Fund I and upcoming Fund II. “We believe we have a significant investment opportunity in Bengaluru for the next 10 to 12 years, which is our typical investment cycle,” Andreea Danila, founder and general partner of GMCL, recently announced. It’s quite clear that Bengaluru is regaining its charm, opening its doorway of opportunities even wider.

Optimism All-Around
According to the RBI data, the net FDI flows in India recorded $ 10.58 billion in the financial year 2024. Of the $ 70.9 billion gross FDI inflows in the country, $44.4 billion was repatriated through dividends, share sales or disinvestment. Likewise, the Indians invested $15.96 billion overseas. Indian companies also announced over 550 greenfield FDI projects abroad. India is aiming for an annual gross foreign direct investment not short of $100 billion, which marks a significant increase from the average of over $ 70 billion over the past five years. Despite a decline in FDI last year due to geo political uncertainties, including the Russia-Ukraine war and the Israel-Hamas conflict, India Inc. is optimistic about reaching the $100 billion target for the current fiscal year. This positive wind is expected to continue over the next five years. The importance of ongoing reforms and policies to enhance investment attractiveness and stimulate growth across various sectors has also played an important role in this surrounding optimism.